Siemens Gamesa Renewable Energy (SGRE) says that it has arranged ”sustainable” FX hedging contracts, totalling €174 million, with BNP Paribas.
These are the first FX hedging deals to be arranged under BNP Paribas’s new sustainable derivatives platform, which is linked to the United Nation’s (UN) Sustainable Development Goals (SDG). In a release announcing this news, SGRE says that it has converted a notional total of €174 million in FX hedging deals to ‘green’ transactions.
The reason why it is describing this as ‘green’ hedging is that the derivatives are being used to hedge the FX exposure of selling offshore wind turbines in Taiwan, while any premium payments involved in the transactions will be directed towards financing forestry projects.
As Amine Bel Hadj, global head of sustainable finance for global markets at BNP Paribas, explains it: “To accompany Siemens Gamesa´s sustainable journey, the bank is providing this hedge of the FX exposure attached to a renewable project, as well as committing to reinvest any premium in a reforestation project.”
David Mesonero, CFO at Siemens Gamesa, comments: “We are taking the lead in green finance, and proving that sustainability can be present in every step we take as a company. This operation hedges foreign exchange risk in a key market for us, and contributes to mitigating the effects of climate change at the same time. By walking our talk we’re leading the way for more and more companies.”
With over 95 GW of installed wind capacity, Siemens Gamesa claims to contribute to cutting emissions of CO₂ by 247 million tons per year, the equivalent of planting 4 billion trees. It has committed to becoming carbon neutral by 2025 by replacing conventional emission-intensive power sources with renewable energies in its operations.